Small Business News
The US Small Business Administration issued a final rule July 16 amending its regulations governing small business subcontracting intended to ensure subcontracting plans are adhered to. The rules apply to all covered contracts that contain a small business plan whose value is above $1.5 million for construction and $650,000 for all other contracts. Significant provisions include new regulations
(1) requiring a prime contractor to either award subcontracts to small businesses that were identified in its proposal or provide a written justification for not doing so (2) the prime contractor must fully pay the valid invoices of its small business subcontractors in a timely manner or report its failure to do so and (3) authorizing agencies to consider an offeror’s small business subcontracting performance as an evaluation factor. The provisions are being lauded for lessening the incentive to freeze out subcontractors, especially in this time of spending cuts at the prime contract level and for clarifying the responsibilities of the CO in monitoring small business subcontracting plan compliance.
In separate SBA news, the SBA issued a final rule, effective Aug 27, that states if a firm willfully seeks and receives an award by misrepresenting its size or status as a small business there is the presumption that the loss is equal to the value of the contract, subcontract, cooperative agreement or grant. The final rule also provides that an authorized official must sign in connection with a size or status certification of a contract and businesses that files to update their size or status in the Online Reps and Certs Application database at least annually will no longer be identified in the database as small or other socioeconomic status until the representation is updated (Fed. Reg. 38811).
Finally, the Office of Management and Budget issued a memo July 11 announcing it would extend its 2012 policy for accelerating payment of invoices to prime contractors having small business subcontracts, with the intent to improve cash flow for the subcontractors. The original policy guidance was established in July 2012, extended to July 2013 and now extended again to July 2014 which required agencies to pay prime contractors as promptly as possible, with the goal of 15 days. The expectation is this will, in turn, allow prime contractors to pay their small business subcontractors in a more timely fashion.
